U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB - Quarterly or Transitional Report
(Added by 34-30968, eff. 8/13/93, as amended)
(Mark One)
[X] Quarterly Report Under Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the quarterly period ended August 31, 1997.
[ ] Transition Report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ___________________ to _______________
Commission file number 0-10035
LESCARDEN, INC.
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(Exact name of small business issuer as specified in its charter)
New York 13-2538207
- ------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
420 Lexington Avenue, New York Suite 2025 10170
- ----------------------------------------- -------------------
(Address of principle executive offices) (Zip Code)
Issuer's telephone number (212) 687-1050
______________________________________________________________________.
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.
Class Outstanding at August 31, 1997
- ---------------------------- ------------------------------
Common Stock $.001 par value 16,192,513
<PAGE>
<TABLE>
LESCARDEN INC.
(UNAUDITED)
CONDENSED BALANCE SHEET
-----------------------
August 31, 1997
---------------
<CAPTION>
ASSETS
------
<S> <C>
Current Assets:
Cash $ 40,615
Inventory 7,988
Prepaid expenses 12,500
----------
Total currents assets 61,103
----------
Security Deposit 3,080
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Total Assets $ 64,183
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LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Currents Liabilities:
Accounts Payable and Accrued Expenses $ 134,803
-----------
Total liabilities 134,803
-----------
Stockholders' Deficiency:
Convertible Preferred Stock $ 1,840
Common Stock 16,192
Additional Paid-In Capital 13,310,440
Accumulated Deficit (13,399,092)
-----------
Stockholder's Deficiency (70,620)
-----------
Total Liabilities and Stockholders' Deficiency $ 64,183
-----------
-----------
</TABLE>
<PAGE>
<TABLE>
LESCARDEN INC.
(UNAUDITED)
CONDENSED STATEMENTS OF OPERATIONS
----------------------------------
<CAPTION>
For the Three Months Ended
August 31,
--------------------------
1997 1996
---- ----
<S> <C> <C>
Total Revenues $ 11 $ 25,121
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Costs and Expenses:
Salaries - Officer 39,471 25,222
Salaries - Office 3,697 3,440
Professional Fees and Consulting 49,911 32,936
Research and Development 9,953 2,524
Rent and Office Expenses 15,335 14,760
Travel and Meetings 8,738 -
Taxes - Other 695 1,316
Insurance 167 103
Other Administrative Expenses 18,222 3,627
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Total Costs and Expense 146,189 83,928
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Net (Loss) $ (146,178) $ (58,807)
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Net (Loss) Per Share $ (.01) $(.00)
----------- -----------
----------- -----------
Weighted Average Number of
Common Shares Outstanding 16,037,366 11,872,010
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---------- ----------
</TABLE>
<PAGE>
<TABLE>
LESCARDEN INC.
(UNAUDITED)
CONDENSED STATEMENTS OF CASH FLOWS
----------------------------------
<CAPTION>
For the Three Months Ended
August 31,
--------------------------
1997 1996
---- ----
<S> <C> <C>
Cash Flows (Used in) Operations:
Net (Loss) $ (146,178) $ (58,807)
Adjustments to reconcile net income (loss)
to net cash used in operations:
Changes in operating assets and liabilities:
Decrease in Inventory 1,500 2,240
(Increase) decrease in accounts receivable - (25,000)
(Increase) decrease in prepaid expenses (12,500) 16,906
Increase in accounts payable and
accrued expenses 20,001 12,000
Net Cash (Used In) Operations (137,177) (52,661)
------------ ------------
Cash Flows Provided By Financing Activities:
Proceeds from exercise of common stock
purchase warrants 62,452 -
----------- ------------
(Decrease) in cash (74,725) (52,661)
Cash- Beginning of period 115,340 53,935
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Cash - End of period $ 40,615 $ 1,274
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</TABLE>
<PAGE>
LESCARDEN INC.
(UNAUDITED)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
August 31, 1997
---------------
Note 1 - General:
The accompanying unaudited financial statements include all
adjustments which are, in the opinion of management, necessary for
a fair statement of the results for the interim periods. The
statements have been prepared in accordance with the requirements
for Form 10-QSB and, therefore, do not include all disclosures or
financial details required by generally accepted accounting
principles. These condensed financial statements should be read in
conjunction with the financial statements and the notes thereto
included in the Company's Annual Report on Form 10-KSB for the year
ended May 31, 1997.
The results of operations for the interim periods are not
necessarily indicative of results to be expected for a full year's
operations.
<PAGE>
LESCARDEN INC.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
-----------------------------------------------------------
Results of Operations
- ---------------------
Overview
- --------
Since its inception the Company has primarily devoted its
resources to fund research, drug discovery and development. In
addition, the Company licenses its technology for commercialization
by other companies and in the fiscal year ended May 31, 1995, the
Company began sales of its proprietary bovine cartilage material,
BIO-CARTILAGE<F1>, to a food supplement distributor for sale through
nutritional food supplement stores in the U.S. The Company has
sustained net losses of approximately $13.4 million from inception
to August 31, 1997. The Company has primarily financed its research
and development activities through a public offering of Common
Stock, and private placements of debt and equity securities and in
recent years, revenues from license fees and product sales.
Three Months ended August 31, 1997 compared to August 31, 1996.
The Company's revenues in the quarter ended August 31, 1996
include $25,000 of license fees from Orphan Medical Inc. ("Orphan")
Orphan is developing the Company's proprietary bovine cartilage
material, CATRIX<F1>, in powder form only, for topical wound healing
purposes. Total costs and expense during the three months ended
August 31, 1997 were 74% higher than those of the comparative
period of the prior year principally due to higher officer's
salary, professional fees and consulting, research and development,
travel and other administrative expenses.
Liquidity and Capital Resources
- -------------------------------
Overview
- --------
The Company has had losses from operations in each of the five
years ended May 31, 1997. This trend may continue in the
foreseeable future. Working capital has been provided since the
Company's inception primarily from the sale of equity securities or
from borrowings from its officers, directors and shareholders and
from outside investors, and in recent quarters, from revenues from
licensing fees and product sales.
Present Liquidity
- -----------------
The Company's present liquidity position is critical. As of
August 31, 1997 the Company's total liabilities exceeded its total
assets by $64,183. The Company will require additional product
sales or funding during, or shortly after the end of, the current
fiscal quarter ending November 30, 1997, to sustain its operations.
As a result of the history of losses incurred by the Company,
the net loss during the year ended May 31, 1997 of ($345,518), and
the limited amount of funds currently available to finance the
Company's operations, the report of the Company's independent
Certified Public Accountants on the Company's Financial Statements
as of May 31, 1996 and 1997 contain an explanatory paragraph
indicating that the Company may be unable to continue in existence.
The Company plans to continue to implement plans to sell BIO-
CARTILAGE to the over-the-counter food supplement market and may
also introduce a second product in the same marketplace, or a
cosmetic product, in the near future. If successful, the Company
may increase cash flow in order to allow the Company to continue to
meet its obligations and sustain its operations. The Company also
plans to try to obtain a short-term financing from the exercise of
common stock purchase warrants and the sales of unregistered shares
of common stock.
The Company has no material commitments for capital
expenditures at August 31, 1997.
<F1>
A registered trademark of Lescarden Inc.
<PAGE>
LESCARDEN INC.
Part II - Other Information
---------------------------
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits: EX-27
(b) Reports on Form 8-K: There were no reports on Form 8-K
filed for the three months ended August 31, 1997.
INDEX TO EXHIBITS
-----------------
27-Financial Data Schedule
<PAGE>
Signatures
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Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
LESCARDEN INC.
--------------
(Registrant)
Date: October 10, 1997 s/Gerard A. Dupuis
Gerard A. Dupuis
Chairman of the Board
Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM LESCARDEN
INC'S AUGUST 31, 1997 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> AUG-31-1997
<CASH> 40,615
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 7,988
<CURRENT-ASSETS> 61,103
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 64,183
<CURRENT-LIABILITIES> 134,803
<BONDS> 0
0
0
<COMMON> 16,192
<OTHER-SE> (86,812)
<TOTAL-LIABILITY-AND-EQUITY> 64,183
<SALES> 11
<TOTAL-REVENUES> 11
<CGS> 0
<TOTAL-COSTS> 146,189
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (146,178)
<INCOME-TAX> 0
<INCOME-CONTINUING> (146,178)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (146,178)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
